House Bill No. introduced by K. Walsh and others aims to revise property tax regulations in Montana, specifically focusing on governmental entity limits on property tax increases. The bill proposes to increase the inflation limitation for calculating property tax levies from one-half of the average rate of inflation to a maximum of 4%. Additionally, it allows local governments to create a large taxpayer reserve account, requiring them to deposit 10% of revenue generated from newly taxable property (excluding class four) into this account. The funds in this account can only be used under specific circumstances, such as when a large taxpayer ceases operations or experiences a significant decrease in taxable value.

The bill also amends existing sections of the Montana Code Annotated (MCA) to clarify how newly taxable property is calculated and how it affects mill levy limitations. Notably, it introduces provisions that allow governmental entities to include certain percentages of newly taxable value from various property classes in their calculations, depending on whether they have established a large taxpayer reserve account. The bill is set to apply to property tax years beginning after December 31, 2025, and includes a codification instruction to integrate the new section into existing law.

Statutes affected:
LC Text: 7-6-4431, 15-10-420
HB0865_1: 7-6-4431, 15-10-420